The Wall Street Journal reported that Bank of America agreed to a $16 billion settlement with the Justice Department to resolve misconduct in its mortgage related products in the run up to the financial crisis.

Out of the $16 billion, roughly $9 billion will go to the federal government, states and other government entities. Additional money would be targeted for consumers to reduce/modify their mortgage balances who are struggling. These actions towards consumers will help families stay in their homes and deal with vacant properties. This will enhance the long-term value of the banks’ portfolios.

This agreement sets the record for fines and damages in a civil settlement between the U.S. government and a company. This tops the figure that J.P. Morgan Chase & Co. paid to the Justice Department for similar issues regarding toxic mortgages sold to investors.

Bank of America has been arguing with the Justice Department over the penalty amount. They claimed they were being singled out for its decision to purchase Merrill Lynch Co. and Countrywide Financial Corp. Those decisions by BofA have cost them billions of dollars in legal damages. The majority of failed mortgage-backed securities credited to Bank of America were issued by Countrywide. Together BofA, Countrywide and Merrill Lynch issued $965 billion in mortgage securities to private investors. This was more than any other big bank during the years 2004-2008. Three-quarters of that total were issued by Countrywide.

The big question for many is why individuals were never held accountable since the civil damages are usually paid by insurers and shareholders. Further, the banks have not pled to criminal conduct, only agreed to civil damages. While Wall Street has paid dearly in damages, the question remains whether justice has been served on those most responsible for the mortgage crisis. Many American taxpayers and investors are wondering this question.